- April 19, 2019
- Posted by: giancarlo
- Category: Regulation
The French government has embraced a new financial sector bill that provides a legal framework for crypto service providers and ICOs in the country. The government is also urging the European Union to adopt its latest cryptocurrency framework.
France accepts new financial sector bill
The government of France has decided to adopt a financial sector bill that provides legal guidelines for cryptocurrency companies and initial coin offerings carried out in the country. The new license introduces both optional and mandatory licensing, while also providing clarity on the type of funds that can invest in the crypto space.
The bill is called the Pacte law (Action Plan for Business Growth and Transformation) and was adopted by the Autorité des Marchés Financiers (AMF), the country’s financial markets regulatory body. According to the AMF, the final part of the Pacte law was adopted on April 11 during its final reading at the French parliament.
The new regulation establishes a legal guideline for cryptocurrency asset providers and ICOs operating in the country. The legislators also tasked the AMF with regulating the crypto space in France.
The bill was first introduced in October 2017 and was presented before the council of ministers in the middle of last year after proper consultation with industry experts and organizations.
License available for crypto service providers
The new regulation allows cryptocurrency service providers to obtain permits and operate under the supervision of the AMF. The licenses made available include that of custodial services, dealers and brokers offering cryptocurrency purchases and sell with fiat currencies or other cryptos, and for cryptocurrency exchange operators.
The licenses will also be issued to remittance, asset management, advisory, and underwriting services provided in the country. The AMF in its post stated that whether they get the optional licenses or not, cryptocurrency service providers looking to provide services to French citizens will have to be registered with the AMF.
Pacte bill provides legal guidelines for ICOs
The new regulation also offered a legal framework for ICO issuers in the country. They are required to get approval from the AMF before carrying out token sales. The issuers are expected to be legal corporate entities in the country or registered, while also providing relevant information about their token, the project, and the company. The token issuers are required to also put in place AML measures to ensure that money laundering and other vices are not carried out with their project.
The AMF clarified that while fundraising via token sale without the agency’s approval is still legal in the country, the token issuers who don’t have AMF’s permission won’t be able to appeal to the general public. The regulatory body will also publish the list of token issuers that have received proper approval, it added.
Funds are allowed for investing in crypto
According to the bill, professional specialized investment funds can invest in digital assets as long as they follow the liquidity and valuation rules which applies to them. Also, professional private equity investment funds can also invest in crypto assets, though it should not exceed 20% of their assets, the AMF added. None of the two funds need authorization from the AMF before investing in crypto space. However, they need to declare to the regulators a month within their creation.
France Urges the EU to adopt a similar framework
The French Minister of Finance, Bruno Le Maire, has urged the EU to take the same regulatory framework for cryptocurrency assets. Le Maire was pointed out that he will propose the bill to his EU counterparts and look for a way to set up a single regulatory guideline on digital assets in the region. The regulation will be based on the French model as Le Maire believes theirs is the right one.